Success Stories

Solar energy in Tunisia

To reduce the country’s dependence on oil and gas, Tunisia’s government has undertaken steps to promote the development and use of renewable energy

A law establishing an “energy conservation system” on energy management in 2005 was immediately followed with the creation of a funding mechanism – the National Fund for Energy Management – to support increased capacity in renewable energy technologies and also improved energy efficiency. The replenishment of this Fund is based on a duty levied on the first registration of private, petrol-powered and diesel powered cars and on import duty or local production duty of air-conditioning equipments with the exclusion of those produced for exports.

Between 2005 to 2008, clean energy plans have already allowed the government to save $1.1 billion in energy bills, relative to initial investments of $200 million in clean energy infrastructure. Primary energy consumption from renewables, together with savings from energy efficiency, are expected to reach 20 per cent of total energy consumption in 2011.

In December 2009, the government presented the first national Solar Energy Plan and other complementary plans with the objective of increasing the share of renewable energy sources from just under 1 percent to 4.3 per cent in 2014. The plan includes the use of solar photovoltaic systems, solar water heating systems and solar concentrated power units for electricity generation.

Total financial resources to implement the plan have been estimated at $2.5 billion, including $175 million from the National Fund, $530 million from the public sector, $1,660 million from private sector funds, and $24 million from international cooperation, all to be spent by 2016 on 40 renewable energy projects. Approximately 40% of the resources are devoted to the development of energy export infrastructure.

The energy savings expected to result from the Solar Energy Plan could reach 22 per cent for 2016, with a reduction of 1.3 million tonnes per year of CO2.

Solar water heating systems – the PROSOL programme
The Tunisian Solar Programme (PROSOL) – a joint initiative of the Tunisian National Agency for Energy Conservation (ANME), the state utility Société Tunisienne de l'Electricité et de Gaz (STEG), the United Nations Environment Programme and the Italian Ministry for the Environment, Land and Sea – provides an example of solar thermal market development.

Financial and fiscal support combines a capital grant qualifying for a VAT exemption, customs duty reduction and a bank loan with a reduced interest rate. Repayment of the loan is organized through the regular utility bill of the state electric utility STEG, with local banks receiving support that allows them to finance SWH projects with reduced interest rates.

This arrangement has generated direct financial benefits for the end users, when comparing the size of the monthly instalments for a SWH system to the earlier electricity bills. A complementary interest rate subsidy was available during the first two years (2005-2006) of the programme, reducing the interest rate of the loan to 0 per cent to the final end user. This support was removed in 2007 and annual interest rates for loan repayment have been 6.5 per cent.

The government provides a subsidy of 20 per cent of the system cost or $75 per square meter, while customers are expected to finance a minimum of 10 per cent of the purchase and installation costs.

Over 50,000 Tunisian families now get their hot water from the sun based on loans amounting to more than $5 million in 2005 and $7.8 million in 2006 – a substantial leverage to PROSOL’s initial cost of $2.5 million. With installed surface of the programme reaching 400 000 m2 , the government has now set a more ambitious target of 750,000 m2 for the period 2010-2014, a level comparable to much larger countries such as Spain or Italy. As of 2008, PROSOL helped avoid 214,000 tonnes of cumulative CO2 emissions. Jobs have been created as 42 technology suppliers were officially registered and at least 1000 companies installed the systems.

In conclusion, the experience in Tunisia demonstrates the potential returns on investing in renewable energy, creating new jobs, and reducing dependency on fuel imports.